Consolidated Water Beats on Q4 Earnings

Zacks

Consolidated Water Co. Ltd. (CWCO) reported fourth-quarter 2013 earnings per share of 7 cents, beating the Zacks Consensus Estimate of 5 cents by 40.0%. However, on a year-over-year basis, earnings plunged a substantial 72.0% due to a decline in the company’s interest income from Ocean Conversion (:BVI) Ltd.

For the year 2013, earnings per share stood at 58 cents, missing the Zacks Consensus Estimate by a cent. Earnings dropped 9.4% year over year.

Share prices of Consolidated Water showed a northward movement following the earnings beat. Favorable financial results in the reported quarter together with promising prospects led to a 5.3% increase in the share price to $13.00 per share on Mar 18.

Revenue

For the quarter under review, Consolidated Water’s total revenues were $15.3 million, lagging the Zacks Consensus Estimate of $16 million by 4.6%. Quarterly revenues also declined 8.4% year over year.

In 2013, revenues were reported at $63.8 million, down 2.5% from $65.5 million in 2012. The shortfall can be attributed to a 5.0% decline in Retail Water sales due to lower gallons of sale from the company’s Cayman retail operation.

Operational Update

In 2013, Consolidated Water’s total cost of revenues was $40.3 million, down 7.2% year over year due to a decline in costs of Retail and Bulk segment revenues.

During the year, general and administrative expenses increased 8.9% year over year to $15.8 million due to higher expenses incurred on project development.

A decrease in yearly revenue was compounded by higher general and administrative expenses. This was partially offset by a drop in total cost of revenues and absence of impairment loss in the reported year. This led to an operating margin of 12.0% compared with 10.6% in 2012.

Consolidated Water’s interest expenses totaled $0.48 million, down 44.8% year over year primarily due to the redemption of debt and a decline in the principal balances of the company’s outstanding bonds.

Financial Update

As of Dec 31, 2013, the company’s cash and cash equivalents were $33.6 million versus $33.9 million as of Dec 31, 2012.

The company had no outstanding long-term debt as of Dec 31, 2013 compared with $5.2 million at the end of 2012.

At the Peers

Connecticut Water Service Inc. (CTWS) reported fourth-quarter 2013 earnings of 17 cents per share, lagging the Zacks Consensus Estimate of 28 cents by 39.3%.

California Water Service Group (CWT) reported fourth-quarter 2013 earnings of 12 cents per share, beating the Zacks Consensus Estimate of 5 cents by an impressive 140.0%.

American States Water Company (AWR) posted fourth-quarter 2013 earnings of 30 cents per share, beating the Zacks Consensus Estimate of 19 cents by 57.9%.

Consolidated Water currently has a Zacks Rank #3 (Hold).

Read the Full Research Report on CTWS
Read the Full Research Report on CWT
Read the Full Research Report on CWCO
Read the Full Research Report on AWR


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